I am really excited about Second Life becoming open source. Boing Boing puts it best:

Second Life is distinct because it allows in-game creators of objects to “own” them, sell copies of them, give them away, and license them under Creative Commons. Most other worlds require that you assign all your copyright to the game’s corporate owners — and prevent you from doing some kinds of creative stuff to avoid copyright hassles (musicians in Star Wars Galaxies could only perform compositions provided by Sony, for example).

But there’s a fly in the ointment — it’s not very meaningful to amass in-game wealth if your ability to use it is contingent on your ongoing good relations with a single company. What good is your wonderful Second Life real-estate, architecture, gadgets and wardrobe if Linden Labs can throw you out at any time? It’s like amassing Soviet-era rubles — you could only spend them in Russia.

But by opening up the source code for Second Life, Linden is inviting a competitive marketplace for Second Life hosters. Indeed, they describe a “Second Life grid” of multiple Second Life hosters who interconnect — the way that today’s Web consists of a single Web with millions of servers that are all linked together by their users.

O’Reilly Radar has more information about the actual source code.